Few people knew what a Ponzi scheme was until New York financier Bernie Madoff’s gigantic-scale fraud came to light in 2008.

Obviously, among those who had no idea were the hundreds of investors who Madoff defrauded over the years, before his deception was revealed by the global financial crisis.

Diana Henriques’ book, first published in 2011, has been updated and re-released to coincide with the HBO telemovie based on Madoff’s story, starring Robert de Niro, and Michelle Pfeiffer as his long-suffering wife Ruth (screening on Sky’s SoHo channel).

Henriques covered the unfolding story for The New York Times, and interviewed more than 100 people involved in the scandal, including Madoff himself.

It’s a sobering tale – not only about how the fraud was perpetrated on innocent investors, but also how regulators looked the other way, or had the wool pulled over their eyes.

She says one of the biggest lessons to come out of the whole sorry affair is “how diabolically difficult it is for regulators to protect the public in the 21st century” – especially from themselves.

Henriques details the snowballing effect of Madoff’s fraud, which had its roots way back in the 1960s, and how the lives of so many people were affected. She also sheds light on Madoff’s character.

Madoff started as a legitimate and successful broker, but he was fuelled by greed.

His shady dealings grew in size and value as he increasingly moved money around to cover losses, constantly robbing Peter to pay Paul.

On the day of his arrest, Madoff was supposed to be managing nearly US$65 billion of other people’s money – but, in fact, most of it had vanished.

“I always wanted to please people – that was a weaknessI had,” Madoff tells Henriques. “It starts as a very simple thing, and then becomes complicated.”

Henriques’ portrait of Madoff and his crimes is both readable and sobering, a warning to all those who invest without due diligence.

She reminds us that, even as we read this, the next Bernie Madoff is working his dark magic somewhere in the world.